According to PayPal, PayPal Zettle, small businesses will have an integrated solution that enables them to accept a range of payments in-person with the Zettle card reader, helps them start selling online, and also helps them manage sales, inventory, reporting, and payments across channels, all in one place. PayPal Zettle will also enable businesses to leverage PayPal’s suite of payment and commerce solutions – from invoicing to PayPal’s Business Debit Mastercard. 

Partnering with PayPal for both in-person and online commerce, small businesses can offer their customers increased payment options, including credit and debit cards, PayPal and Venmo QR Codes, popular digital wallets and access to PayPal’s business lending solutions. All in-person and online sales can be easily viewed and managed through a business’s PayPal business account, and businesses will have access to their funds typically within one day. 

PayPal Zettle also offers interoperability through PayPal’s vast partner network, so businesses can easily link their PayPal Zettle accounts with their preferred e-commerce, accounting, and point-of-sale partners. PayPal Zettle is already integrated with a range of partners including BigCommerce, Lightspeed, QuickBooks Online and SalesVu, and will be integrating with additional partners in the coming weeks and months.  

“Consumers want seamless and integrated digital experiences no matter where they shop. As a result, small businesses need access to omnichannel payment and commerce tools to help them effectively compete and meet their customers wherever they are – in-person, online, and in-between,” said “We believe in the power of small businesses, and we will leverage PayPal Zettle to better serve in-person businesses and enable them to go digital seamlessly.” 

Jim Magats, SVP, Omni Payments, PayPal

PayPal Zettle is available to small businesses across the U.S. beginning today. Businesses can purchase their first PayPal Zettle card reader for $29, with additional readers available for $79. The transaction rate in the U.S. for card processing is 2.29% + $0.09 cents* at launch, and PayPal and Venmo QR Code transactions will be 1.9% + $0.10 cents* via PayPal Zettle.

*Fees are subject to change. 

Square Financial Services began operations after completing a long charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions.

Named Square Financial Services, the bank will operate as an independently governed subsidiary of Square Inc.

The bank will be be based in Salt Lake City and will provide business loans and deposit products to sellers who use its card reader and other point-of-sale services.

Fintech companies typically partner with third-party banks to service products such as small-business loans. Moving forward, Square Financial Services will be the primary provider of financing for Square sellers across the U.S.

Photo | GettyImages

Earlier this week, Squarespace, the website creation and hosting platform, expanded its “off-line” or “in-person” point-of-sale (POS) feature. The new off-line merchant-service capability is enabled by Square.

(Despite similar names, Squarespace and Square are separate companies that provide complementary web-related services. Squarespace is a website creation and hosting service. Square provides financial transaction services.)

If you are a merchant who does not need off-line credit card processing, there will be no charge or changes to your current Squarespace account.

Find more pricing and capabilities information at the Squarespace “Help Center.”

Illustration via Squarespace

Square Inc., a pioneer in the mobile payment processing category with its point-of-sale credit card readers and plug-in smartphone peripherals, today unveiled (10.18.2018) a new device intended to replace its legacy hardware device. The Square Terminal is described as an “all-in-one” mobile device that will replace keypad credit card processing devices. In addition to accepting credit cards, Terminal will also process mobile payments through Apple Pay, Google Pay, Samsung Pay, and NFC.

An expanded Square ecosystem

The new mobile product was designed by an in-house hardware team to be wifi enabled and have an all-day battery life. According to the company, these features will enable sellers like restaurant waiters, salon stylists or shop owners to check-out customers anywhere throughout the business . Owners can also charge customers by manually inputting a payment amount, or by selecting from an inventory displayed on the screen. Sellers can add items and track sales through Square software, which they can set up on their phones or desktops.

Costs & Fees

2.6% | Transaction fee
+10¢ | Additional fee per payment

$399 | Price of the device
-$300 | Incentive credit for sellers that switch to Square

Images via Square Inc.

We have a couple of rules at SmallBusiness.com. (1) Our users should never make business or financial decisions based solely on what they read here, or anywhere, without first discussing it with their trusted financial advisor. (2) Be wary of things you don’t understand, like, say, Bitcoin, even when people seem to be making lots of money doing whatever it does. Those caveats aside, we keep getting questions like the ones that are the topics of this article; questions about Bitcoin and Blockchain. If you don’t know what those are, see #2.  Fortunate for us, Steve King, a partner at Emergent Research and a regular contributor to SmallBusiness.com, was willing to tackle these questions.: What is an initial coin offering? Are they good ways to raise money? Steve’s overview is below, but a good place to start your journey of understanding an “ICO” is the article, “What the Hell is an Initial Coin Offering” on the MIT Technology Journal website.

See previous coverage of Bitcoin and Blockchain on SmallBusiness.com

What is an initial coin offering?

An initial coin offering is a new way of raising money. The company raising the money issues virtual coins or tokens and selling them to the public. A coin or token sale can be much like an initial public stock offering (IPO). (Note: However, and this is important to understand, ICOs are not currently regulated like IPOs.)

ICOs can also be like a crowdfunding campaign in that in many cases the coins can be used to purchase a product or service from the issuing company.

Startups have raised about $2.2 billion through ICOs so far this year, according to Coinschedule.com.

Unlike a stock IPO, where companies sell shares, an ICO lets investors buy digital “coins” used on cryptocurrency platforms. Companies built using blockchain, a digital database for recording financial transactions, raise money by selling these tokens, which can be used to pay for goods and services on their platform or can be stashed away as an investment. (CNBC.com)

What do ICOs have to do with Bitcoin?

 istock

“I’m sorry. We don’t accept cash.” Recently, while paying for an order at a new independent coffee shop near the offices of SmallBusiness.com, I heard that phrase for the first time (other than during a Southwest Airlines flight). Granted, this shop was located in a neighborhood with a high density of millennials, hipsters and coffee lovers (my demographic). It’s also in a neighborhood where you’ll find lots of young merchants with little resistance to trying out new technology. That’s a good thing, as the options for payment choices are about to change even more dramatically than they have in the past five years — back when you could buy a cup of coffee with cash.

If you are a small business owner who runs a retail store, restaurant or any type of business that involves some type of point of sale or person-to-person payment, get ready for a new generation of cash alternatives. Here’s a roundup of some of the recent developments that big banks, big technology companies, and big digital brands will soon be wanting small businesses to adapt.

Major banks cooperate to create Zelle, a mobile digital payments network

After six years of “laying a foundation,” more than 30 major banks* are introducing Zelle (pronounced “zell”), a digital payments network that will allow people to send money instantly through participating banks’ mobile apps.

Quote (NYTimes.com):

“The casual payments that people make every day — $20 for the dog walker or $50 to split a dinner check with friends — have long been one of the American banking system’s thorniest problems. Instant person-to-person payments are common in many countries, but in the United States, sending cash between banks is often a technical ordeal. Zelle’s pitch is that it will be fast, free and ubiquitous. The interface is almost identical at each participating bank, and setting it up takes only a few seconds. To send money to others, you need only their phone number or email address. If their bank is part of Zelle’s network, recipients can immediately sweep the cash into their own checking account.”

Venmo & Square have one word for you: Plastics

Paypal’s Venmo, the early winner in person-to-person app-enabled payments, and the point-of-sale payments company, Square, are both entering the plastic, pre-paid, debit card arena. The Venmo card will allow people who use its app to make purchases in brick-and-mortar stores using money stored in their Venmo account. Up to now, Venmo has been an app that people use to transfer money to other Venmo users, including businesses that accept it. In May, Square, best known for its point-of-sale and smartphone swipe devices, announced the launch of a similar debit card (like the all black one above).

Apple Pay ‘Cash’ will let customers make transactions via text

At its major developer’s conference last month, Apple unveiled a new peer-to-peer payments service that will be included as part of its next-generation iOS, Apple’s operating system for the iPhone and iPad. Like others in the peer-to-peer payments arena, the feature will let users send money to family or friends or merchants accepting Apple Pay — or even transfer money to a bank account. Its unique feature: such transactions and payments can be carried out through Apple’s text messaging app, iMessage.

*Participating banks (alphabetically): Ally Bank, Bank of America, Bank of Hawaii, Bank of the West, BB&T, BECU, Capital One, Citi, Citizens Bank, Comerica Bank, ConnectOne Bank, Dollar Bank, Fifth Third Bank, FirstBank, First Tech Federal Credit Union, First Tennessee Bank, First National Bank, Frederick County Bank, Frost Bank, HomeStreet Bank, JP Morgan Chase, KeyBank, M&T Bank, MB Financial Bank, Morgan Stanley, PNC Bank, SchoolsFirst Federal Credit Union, Star One Credit Union, SunTrust Bank, TD Bank, USAA, U.S. Bank, and Wells Fargo.

Yesterday (September 5, 2016), the U.S. Consumer Finance Protection Bureau (CFPB) put into motion the process of issuing final rules and regulations related to pre-paid credit cards and new forms of digital payments, including transactional apps like Paypal’s Venmo and Google Wallet. The new rules will generally apply to prepaid accounts starting Oct. 1, 2017, though the requirement for submitting agreements to the (CFPB) takes effect in October 2018.

The use of prepaid cards has exploded over the last decade
Amount consumers put on pre-paid money cards annually

$1 billion | 2003
$65 billion | 2012
$121 billion | 2018 (projection)

In the U.S., the cards and their smartphone app equivalents are facilitating the long-envisioned cashless society. Pre-paid cards are used today for:

• Person-to-person payment platforms (i.e., Venmo)
• Payroll cards
• Student financial aid disbursement cards
• Tax refund cards
• Government benefit cards (i.e., unemployment insurance and child support)

Because the role of prepaid credit cards and transaction smartphone apps is rapidly becoming as ubiquitous as other forms of money cards (credit, debit, etc.), the CFPB’s new rules stem from the Electronic Fund Transfer Act. “Our new rule closes loopholes and protects prepaid consumers when they swipe their card, shop online, or scan their smartphone. And it backs up those protections with important new disclosures to let consumers know before they owe.” CFPB director Richard Cordray said.

Industry support

According to Pymnts.com, most of the industry players in pre-paid card products are  supportive of clear rules as a legitimizing force in their industry. According to the CFPB’s report, these protections are derived from Truth in Lending Act and the Credit Card Accountability Responsibility and Disclosure Act (CARD Act) and will in some sense treat prepaid cards much like credit cards.

Industry opposition

Also according to Pymnts.com, the new rules — despite both Google and PayPal’s objections — cover “digital wallets capable of person-to-person transfers and storing funds.” Analysts also suspect that Square Inc.’s Square Cash and Dwolla’s payment tool will also fall under the new rules. (Wallets like Apple Pay — which simply store payment credentials issued by banks — will not fall under the new rule.)

What the new regulations cover

The new rule gives prepaid account consumers  protections under the Electronic Fund Transfer Act, which are similar to those for checking account consumers. They include:

VIA | Pymnts.com | ConsumerFinance.gov (Final Rule PDF)

Only 39 percent of small business merchants have upgraded their point-of-sale devices to accept payments from chip-embedded credit cards. As we shared last August, if a merchant didn’t upgrade their payment devices to process chip credit cards by October 1, 2015, the merchant would be liable for most fraudulent point-of-sale (POS) card transactions. (Previously, the card issuer was typically liable.) As part of their ongoing research into small business technology adoption, Pymnts.com and Sage explored the reluctance of small merchants to upgrade their POS systems. Here is part of what they discovered. (Download full report at Pymnts.com.)

Methods of payments accepted by small businesses

(Percentage of respondents whose business accepts types of payment, either face-to-face or electronically.)

98% | Checks
67% | Cash
64% | Credit / Debit Cards
53% | ACH / Direct Debit
36% | Wire Transfer
13% | Pay Pal
1% | Apple Pay
1% | Android Pay

How small businesses rate themselves for their use of technology to pay others

8% | Ten (Best)
11% | Nine
14% | Eight
13% | Seven
10% | Six
16% | Five
9% | Four
7% | Three
7% | Two
5% | One (Worst)

Merchants that can accept chip cards

(Percentage of merchants who’ve upgraded their point-of-sale equipment in order to accept EMV “chip” cards)

39% | Can process chip credit cars
36% | Cannot process chip credit card
19% | Doesn’t if their POS system has the capability
5% | No answer

Reasons merchants upgraded to accept chip card payments

(Percentage of merchants)

38% | Security
36% | It was required
7% | Included with upgrade
4% | Ease of use
5% | Other

Illustration: ThinkStock

On Monday (11/23/2015), the point-of-sale payments company Square announced it had started sending out its new credit card reader that accepts chip cards and wireless payments.

In June 2015, we covered Square’s unveiling of the new device. We also pointed to the tweet below announcing that 250,000 of them would be distributed for free. However, in the company’s press release, no mention of the “free” readers was made. We’re guessing that means the freebies were already taken.

We’re giving away 250K Square Readers free—because we want *every* business to be able to accept Apple Pay. http://t.co/s5hbf3hrZf #WWDC15

— Square (@Square) June 8, 2015

Cities where the Square Readers are arriving

According to the company’s press release, the first 100 readers were already being used in these cities:

• Atlanta
• Austin
• Boston
• Denver
• Los Angeles
• Nashville
• New Orleans
• Miami
• Minneapolis
• Philadelphia
• Phoenix
• Sacramento
• Santa Cruz
• Seattle
• Tampa
• Washington, D.C.

How to order a Square Reader

To learn more about the reader and to order one for $49, you can visit SquareUp.com.

Reminder: Why you should have a chip card reader

On October 1, 2015, new regulations were activated (after years of being planned) that shift liability from banks to merchants (sellers) if the merchant does not use a chip card reader. You can read about it in an earlier SmallBusiness.com article.

(Photos: SquareUp.com)

We see (and share) many lists related to cities and their small businesses. Most focus on the biggest, best or some unique attribute related to the company that sponsored the research. However, this list from PayPal is somewhat unique because it is based on actual data, not an opinion survey or collection of factors that can influence the nuances of the research.

U.S. Cities With Fastest Year-Over-Year Growth in Small Business Ecommerce

1. Fargo-Valley City, North Dakota
2. Lafayette, Indiana
3. Odessa-Midland, Texas
4. Traverse City-Cadillac, Michigan
5. Jackson, Mississippi
6. Watertown, New York
7. Beaumont-Port Arthur, Texas
8. Casper-Riverton, Wyoming
9. Charlottesville, Virginia
10. North Platte, Nebraska

Fargo?

Okay. We’ll admit it’s a bit challenging to understand exactly what this top ten list actually measures. According to PayPal, these are the “fastest growing small business markets determined by Year over Year (YoY) Total Payment Volume (TPV) as of May 2015.” A consideration to take (translation: we’re guessing), the payment volume also could have a tight correlation to the cities where PayPal has been most successful in getting small businesses to add the PayPal button as a payment option.

However, even if the volume is a measurement of PayPal’s ability to get a bigger piece of the payments pie, it’s still an indication of something significant and counter-intuitive to most.

The cities on this list are primarily in America’s Heartland.

This list includes some city names that may be unfamiliar to people who live in urban centers near large bodies of water. For some of these cities, this could be the first time they’ve ever made it onto a list that includes a reference to technology. In other words, this is a list that reveals there’s something significant happening outside the locations where VCs live and recent engineering grads flock.

This list reveals that ecommerce, while still used by only a fraction of small businesses, could be seeing its biggest growth in markets outside the coastal early-adopting meccas. It would make sense that the fastest rates of growth can be found in places with the lowest basis on which to begin. (If there were five small businesses using ecommerce in Fargo last year and 50 this year, the growth rate would be out the roof.)

Others cities with small businesses having fast rates of growth in  ecommerce volume

Lafayette, Louisiana; Sioux Falls (Mitchell), South Dakota; Juneau, Alaska; Bowling Green, Kentucky; Davenport-Rock Island-Moline, Illinois; Indianapolis; Bluefield-Beckley-Oak Hill, West Virginia; Jonesboro, Arkansas; Rapid City, South Dakota; and Eugene, Oregon.